By 'the paradox of asset pricing' Peter Bossaerts refers to his contention that, despite its apparent generality and sophistication, the theory of finance has largely been a failure empirically. Bossaerts reviews the major areas of finance: theory, empirical methods, empirical results and...

markets, as well as predictions for optimal default by borrowers.

Recent years have seen a protracted debate on the "fiscal theory of the price level". This doctrine is based on the intertemporal government budget constraint, which says that the real value of the government debt equals the discounted value of future government surpluses. It is observed that...

The single most important proposition in economic theory, first stated by Adam Smith, is that competitive markets do a good job allocating resources. Vilfredo Pareto’s later formulation was more precise than Smith’s, and also highlighted the dependence of Smith’s proposition on assumptions...